**Please Help**

Using the following financial statistics, provide the complete balance sheet and sales information for St. Martin Ltd.

1	Liabilities/Equity	30%
2	Immediate liquidity	1,1
3	Asset turnover	2
4	Time to collect on accounts receivable	40 days
5	Gross margin	40%
6	Inventory turnover	5 times

Balance sheet (in$)

Cash = 2 930	Accounts payable = 19 500
Accounts receivable = 18 520	Common Stocks = 25 000
Inventories = 20 280	Non-retirement earnings = 40 000
Capital assets = 42 770

Total assets = 84 500 $

Liabilities and shareholders' equity = 84 500 $

Sales = 169 000 $

Cost of goods sold = 101 400 $ (sales - gross profit)

Explain the concept of positive financial leverage and the consequences for a firm wishing to borrow. How can positive financial leverage be established?